"Capital in the Twenty-First Century,” the new book by French economist Thomas Piketty, is a bona fide phenomenon. Other books on economics have been best-sellers, but Mr. Piketty’s contribution is serious, discourse-changing scholarship in a way most best-sellers aren’t.
And conservatives are terrified. James Pethokoukis of the American Enterprise Institute warns in National Review that Mr. Piketty’s work must be refuted, because otherwise it “will spread among the clerisy and reshape the political economic landscape on which all future policy battles will be waged.”
Well, good luck with that. The really striking thing about the debate so far is that the right seems unable to mount any kind of substantive counterattack to Mr. Piketty’s thesis. Instead, the response has been all about name-calling — in particular, claims that Mr. Piketty is a Marxist, and so is anyone who considers inequality of income and wealth an important issue.
Why is “Capital” having such an impact? Mr. Piketty is hardly the first economist to notice we are experiencing a sharp rise in inequality or to emphasize the contrast between slow income growth for most people and soaring incomes at the top. Mr. Piketty and his colleagues have added historical depth to our knowledge, demonstrating that we really are living in a new Gilded Age, but we’ve known that for a while. What’s really new about “Capital” is the way it demolishes that most cherished of conservative myths — the insistence that we’re living in a meritocracy in which great wealth is earned and deserved.
For a couple of decades, the conservative response to attempts to make soaring incomes at the top into a political issue has involved two lines of defense: first, denial that the rich are actually doing as well and the rest as badly as they are, but, when denial fails, claims that those soaring incomes at the top are a justified reward for services rendered. Don’t call them the 1 percent, or the wealthy, call them “job creators.”
But how do you make that defense if the rich derive much of their income not from the work they do but from the assets they own? And what if great wealth comes increasingly not from enterprise but from inheritance?
Mr. Piketty shows that these are not idle questions. Western societies before World War I were indeed dominated by an oligarchy of inherited wealth — and his book makes a compelling case that we’re well on our way back toward that state.
So what’s a conservative, fearing that this diagnosis might be used to justify higher taxes on the wealthy, to do? He could try to refute Mr. Piketty in a substantive way, but so far all I’ve seen is name-calling.
I’ve been involved in debates over inequality for years and have yet to see conservative “experts” dispute the numbers without tripping over their intellectual shoelaces. It’s almost as if the facts are fundamentally not on their side.
At the same time, red-baiting anyone who questions any aspect of free-market dogma has been standard right-wing operating procedure ever since the likes of William F. Buckley tried to block the teaching of Keynesian economics, not by showing that it was wrong, but by denouncing it as “collectivist.”
Still, it has been amazing to watch conservatives, one after another, denounce Mr. Piketty as a Marxist. Even Mr. Pethokoukis, who is more sophisticated than the rest, calls “Capital” a work of “soft Marxism,” which makes sense only if the mere mention of unequal wealth makes you a Marxist. (And maybe that’s how they see it: recently former Sen. Rick Santorum denounced the term “middle class” as “Marxism talk,” because, you see, we don’t have classes in America.)
And The Wall Street Journal’s review, predictably, goes the whole distance, segueing from Mr. Piketty’s call for progressive taxation as a way to limit the concentration of wealth — a remedy as American as apple pie, once advocated by leading economists and mainstream politicians, including Teddy Roosevelt — to the evils of Stalinism. Is that really the best the Journal can do?
The fact that apologists for America’s oligarchs are evidently at a loss for coherent arguments doesn’t mean they are on the run politically. Money still talks — indeed, thanks in part to the John Roberts Supreme Court, it talks louder than ever.
Still, ideas matter, too, shaping both how we talk about society and, eventually, what we do. The Piketty panic shows that the right has run out of ideas.
Paul Krugman is a syndicated columnist for The New York Times.